INCOME TAX11 Sept 2026
₹20,000 extra every month: Why paying off your personal loan first may win over an SIP | Mint
A ₹20,000 monthly raise leaves you choosing between clearing your personal loan faster or starting a mutual fund SIP (systematic investment plan). On a ₹5 lakh loan at 14%, paying about ₹37,100 monthly clears it in nearly 15 months, saving roughly ₹68,000 in interest. Investing that freed-up money afterwards can build a bigger corpus. Check your loan rate before deciding.
Key Statutory Highlights
- On a ₹5 lakh personal loan at 14% for three years, the EMI is about ₹17,100, and paying only the EMI means roughly ₹1.15 lakh in interest.
- Paying about ₹37,100 each month instead clears the loan in nearly 15 months, bringing interest down to roughly ₹47,000 and saving nearly ₹68,000.
- Investing ₹37,100 monthly after clearing the loan builds about ₹20.95 lakh in five years at an assumed 12% return, against ₹16.33 lakh from a ₹20,000 monthly SIP.
Actionable Advice for Taxpayers / Founders:Compare your personal loan's interest rate with the return you realistically expect from your SIP, and ask your lender about foreclosure charges before choosing. The 12% return is only an assumption, so don't treat it as certain.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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